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Thrift: the daughter of prudence, the parent of liberty

Chancellor of the Exchequer George Osborne outside 11 Downing Street before heading to the House of Commons to deliver his annual Budget statement. PRESS ASSOCIATION Photo. Picture date: Wednesday March 19, 2014. See PA BUDGET stories. Photo credit should read: Anthony Devlin/PA Wire BUDGET_Osborne_114109.JPG

Chancellor of the Exchequer George Osborne outside 11 Downing Street before heading to the House of Commons to deliver his annual Budget statement. PRESS ASSOCIATION Photo. Picture date: Wednesday March 19, 2014. See PA BUDGET stories. Photo credit should read: Anthony Devlin/PA Wire BUDGET_Osborne_114109.JPG

MP John Hayes writes for the Lincolnshire Free Press

The famous economist John Maynard Keynes, in a statement of the obvious, decreed that “in the long-run we are all dead”.

But to disregard the future is to cheat those born later; surely we all care about the long-term security of our children and their generation.

The flaws in Keynes’ thinking explain how Britain became addicted to debt. We became a nation living on the never-never, as thrift was replaced by an eagerness to satisfy ever greater material desires.

The future of the country, however, depends on those hard-working, thrifty people who plan for the long-run and save for it.

Interest rates are at a historically low level, vital to borrowers and mortgage payers who wouldn’t have been able to weather the economic storm otherwise.

But these conditions have been less favourable to savers, particularly those looking to convert their savings into a pension.

Constituents often tell me that they want to save for their future – indeed 24million people have an Individual Savings Account (ISA). Many say to me that they would like to save more than the current tax free limit of £5,500 on cash ISAs. So it’s good news that the chancellor has tripled the limit.

Currently, most people preparing for their retirement find they have to buy an annuity, even though the rate of return is unimpressive, the timing not right, or they’d prefer to free up more of their savings.

Those saving for their future should be able to make decisions about their own money, so it’s time we trusted them rather than telling them what to think.

In future, pensioners will have the freedom to draw down as much or as little of their pension pots as they want, when they want and no one will be forced to buy an annuity.

Just think of the opportunities this change will offer. People in their sixties and beyond deserve the chance to fulfil unrealised ambitions or embark on new adventures.

 

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